Evaluating the effects of cultural and psychic distance on multinational corporate performance: a meta-analysis

Abstract

The conceptual and empirical relationship between Cultural and Psychic Distance (CD&PD) and Multinational Enterprises' (MNE) performance is a subject that still remains considerably underexplored. Regardless of the large number of studies, previous studies have delivered a mixed bag of results. Although previous meta-analyses have analysed the overall relationship as presented in the literature, they did not produce in-depth investigations of the moderators of the relationship. In this paper we claim that it is this lack of moderators which is the potential source of inconsistency in literature findings. Using a sample of 56 articles, the meta-analysis results indicate that different variables advocate a different relationship between CD&PD and multinational enterprises' performance, thus confirming the vast number of moderators for the relationship as well as their crucial role. The most important sources of inconsistency identified from the analysis are the different measures used to capture the CD&PD and multinational enterprises' performance.